President Dr. Mohamed Muizzu has announced that, following the implementation of robust policies to bolster the Sovereign Development Fund (SDF), more than $275 million has been successfully deposited into the fund.
In his Presidential Address, President Dr. Muizzu highlighted that upon assuming office, the administration faced significant financial strain. This was primarily due to the obligation to repay a $500 million sukuk issued by the previous government in 2021 at a higher cost to settle a $250 million bond taken from the international debt capital market in 2017. The President further noted that the IMF’s Article IV report, prepared on November 23, 2022, classified the Maldives at a “high risk of debt distress,” which presented an additional major challenge.
The President emphasized that from its first day, the government has been diligently preparing for the repayment of the sukuk. He noted that these strategic measures have led to a substantial increase in the foreign currency reserves of the SDF.
“Under the policies established by this administration to enhance dollar deposits, the SDF currently holds over $275 million. In contrast, when this government took office, the usable foreign currency in the SDF was a mere $2 million. Credit rating agencies are now recognizing the improved foreign currency liquidity of the SDF under this administration. Furthermore, the cost of financing for these transactions conducted by the previous two administrations had surged into double digits, reaching as high as 10.5%,” the President stated.
The President also detailed that the $150 million sukuk payment due in April this year is planned to be settled using the foreign currency accumulated in the SDF. He assured that after repaying a portion of this sukuk, the remaining balance would be refinanced at an interest rate not exceeding 9%. This, he noted, stands in contrast to the fiscally irresponsible practices of previous governments. President Muizzu concluded by stating that the administration’s goal is to liberate the nation from the heavy debt trap inherited from the past and to transform the Maldives into a financially empowered sovereign state.
